The Invention Of The Automobile History Essay
After successfully conquering every peak on his way up, John grew bolder in his borrowings. He was never afraid to take huge loans from the bankers, investors and market. In his early years John D. Rockefeller had to approach banks on his knees, yet he was quite tactful in his methods. He would paint a glossy image of the venture he destined to pursue or expand. John never showed eagerness in his dealings or at the time when he was in an urgent need of money. John was like an adept gambit who played his cards carefully. But unlike the cardsharper’s John’s every single move was based on his calculations and not gut alone. John D. Rockefeller had a stronghold of cash at his disposal and thanks to his practices, he won many bidding contest in the business world. His credit ratings, borrowing and repaying capacity had won him loyalty of bankers. Who would bend the rules for this VIP customer.
No individual can attain success without corporation of others.
Apart from building a close alliance with the bankers, John D. Rockefeller also formed alliances with insurance companies. In 1866, John served as a director of a fire insurance company and in 1868 he became the most valuable director of the Ohio National Bank. With allies in form of bankers and insurance companies, John simply was indestructible in the oil industry. However, the added responsibilities of board meetings, where trivial issues were on the agenda, John resorted to his personal venture. He was often ejected from his position, but always replaced by someone who could act as his proxy.
The shrewd oil tycoon, John at home front had maintained strikingly opposite, cajole environment. The couple moved into “Millionaires Row” a nickname of the town known for rich households. The house at 424 Euclid Avenue had an illustrious exterior and landscape, but the interiors were ironically opposite. It had a very basic furniture and décor. The couple seldom engaged in ruthless luxury and devoted their idle time reading the bible, or visiting a local church. Though a wealthy businessman John D. had a very few pairs of decent suits. Even Laura would modestly dress up, sometimes she even sported her patched up gown in the public, which she sewed herself. John’s only luxurious spending was on horses; he domesticated and rode them in the neighbouring woods. He preferred staying indoors on Sunday afternoon and detested going to social gathering, which had dance programs and served intoxicants. John until his death had no ill vices, he received zest from puritan belief, gardening and planting trees. Rockefeller since his Moravia days was captivated by nature; he would often spend time in open air, or took a nap under a tree or riding horse. Though considered money mad, John would sometimes work from home and give instructions via telegraph.
John D. Rockefeller’s family became complete when god blessed him and Laura with three daughters Elizabeth, Alta and Edith. John was an affectionate father, but his parenting methods were slightly odd from others. The children were homeschooled and cut off from any outside negative influence. The home was not dull with heavy puritan lessons, instead it was lively and cheerful as John would play blind man's bluff with his children. He would take them to swim, or indulged in skipping ropes, ice skating in winters and even riding bicycles with his children around the woods was one of his preferred pass times. John’s empty childhood made him more juvenile around his kids. He seldom scolded or spoke harshly to his children. He loved telling fairy tales and performing stunts at the dinner table by balancing china clay plates on his nose. John ensured that his children never knew about their father's enormous wealth and hence they were raised in an ordinary fashion. Sharing and curbing desires were taught to children from early on. Rockefeller’s kids knew nothing about the world outside their property, except for Baptist Church, which they attended on Sunday. John D. Rockefeller rediscovered his lost childhood through his kids. As John played a role of cheerful father, Laura was bestowed with maintaining discipline. Every weekend the kids gathered in the living area and confessed their sinful thoughts and actions, which withstood Baptist beliefs. John methods of teaching valuable lessons were slightly genial then his wife, he would play games, which taught his children Punctuality, and thrift. He gave them allowance based on their weekly chores such as sharpening pencils, cleaning windowpanes, catching bugs etc. Children from beginning were asked to maintain ledgers of their personal allowances. The children also learnt about donating money to the needy and for religious causes.
The turning point came in John D. Rockefeller’s professional life when he acquainted like minded, Henry Morrison Flagler. A self-made man, Flagler, lost his personal fortune in the salt business at the end of civil war. Undeterred by his failure, Flagler acquainted himself to a wealthy Whiskey Distiller of Cleveland and later become his son-in-law. He ran the Whiskey Distillery efficiently and his company showed great promise under his guidance.
Choosing Flagler as a partner defied John’s staunch puritan values. According to the Puritans, intoxicants were sin and individuals who made them, unknowingly served the Satan. But Flagler was not only a savvy businessman, but also an individual who had mastered the science of making contracts. His agreements were so efficiently drafted that he left no room for ambiguity and errors. Flagler was well versed in law and could teach one or two to the prominent lawyers of the time. Alike William, Flagler was born with a honey tongue, he melted his opponents with drop dead gorgeous looks and charisma. Having a partner on board, with such a remarkable talent was beneficial for the company. John knew Flagler was not the money guy, hence he turned his attention to Flagler’s wealthy father-in-law Stephen V. Harkness. Carefully listening to John’s business proposal the old baron readily agreed to invest $100,000 in Oil Refinery of Ohio, on terms that his son-in-law, Flagler will represent on his behalf. The neat careful contracts were drawn, making John, Andrews and Flagler the proprietors of Standard Oil Ohio. The largest refinery of America!
“A friendship founded on business is better than a business founded on friendship”.
“Competition is a sin”
The inception of Standard Oil changed the entire oil industry not only in America but worldwide. The company produced worlds finest kerosene and byproducts at a reasonable rate. The Joint Stock Company was divided into 10,000 shares. Orchestrator of the cartel John D. Rockefeller held 2,677 shares and was appointed as the President, William as the vice-president held 1,333 share, and Henry Flagler owned 1,833 share as Honourable Secretary and Treasurer. The rest of the shares were divided between Samuel Andrews, Stephen Harkness and an outside investor Oliver B. Jennings.
Since the formation of Standard Oil, 27 Years old, John D. Rockefeller foresighted the opportunity which lay ahead. The end of the civil war had triggered the industrial revolution in the United States of America. The Improved Production methods, Automation and huge workforce had multiplied profits and outputs of industries. Still the situation of oil industry was nerve-racking and unpredictable, surplus production led to lower prices and profits of Oil refiners. At the time, the barrels would cost $2 but during slump, the cost rose to $12. As the company purchased old crude oil at lower prices, and sold refined oil at higher prices, now found themselves in trouble as Standard Oil products were unsalable, due to the availability of cheap products in the market.
Rockefeller needed men who could execute his plans at a lightning speed. With Flagler on his side they formulated plans to outdo their competitors. They shared the same enthusiasm of numbers and accounting books. Within a small span of time, they hired men who made their small company into a Giant Corporation of the World. Both the partners shared congeal relationship, even they stayed closed by and also shared their office space. They exchanged their business letters making minor corrections before sending it forward. Never once the partners clashed to soothe their ego, they mutually turned things around for the company and themselves.
By 1870, Standard Oil had earned a reputation in the market, but John realized he had far more important role to play in the industry. The swashbuckling businessmen in the Oil sector were the biggest threat to its prosperity. John knew their elimination was requisite, hence together with Flagler they formulated a plan and dangled a carrot in front of the Railroad Companies, who transported crude oil and refined oil for the all the companies in Cleveland. Under this secret Alliance with New York Central and Erie they received reasonable rates for transportation.
On the other hand competitor refiners were charged high prices for the same service. Not only that, for supplying more barrels through their network, Standard Oil also received 75% rebate from the company and their subsidiaries. The company also received commission every time the competitor used New York Central Railroad and ERIE. These secret dealings were never documented on paper, every transaction was made orally. However, this was not illegal but it dangerously flirted with the business ethics of laissez-faire and sportsmanship. On his path of irregularities Devil-Bill was John’s dark passenger, he knew he was breaking a few rules but he covered his tracks tactfully. John D. Rockefeller dealt with people putting forward his strong face, he acted tough and disarmed people with his straitlaced attitude. His attacks were psychological, without saying a single word he would convey a lot. John demanded meeting people at his own turf and terms. This way he would devise a trap for his adversaries.
With no government body to monitor around, the company now enjoyed rebates, commissions and preferential benefits from the Railroads. Standard Oil soon formed and alliance with Lake Shore Railroad, which sky rocketed company’s profits and production. According to this deal Standard Oil promised to the Railroad to transport 60 carloads of refined oil daily, however Standard Oil was not capable to produce that much hence they urged other refiners to transport their supplies through the Lake Shore Company.
John D. Rockefeller though appeared calm on the surface, but deep inside he was always on the edge. There is no rose without thorns, success came at a huge price. John would wake up in the middle of the night worrying about his wealth and the company. Those many sleepless nights were part and parcel of this poor–rich tycoon.
“It is wrong to assume that men of immense wealth are always happy.”
The cabal continued their adventures!
In 1871, Standard Oil once again got into a secret alliance with Railroad owners of Pennsylvania, New York Central and ERIE, which gave them edge over other refiners. A phantom company called Southern Improvement Company [SIC] was formed with 2000 shares, out of which John D. Rockefeller owned 900 shares. According to this treaty the Railroads hiked their transportation charges for other refiners but the companies under SIC received a 40% rebate on their transport, plus an additional 40% every time the competitor used the railroad services. This added woes to small refiners who went bust within a brief period of time.
By 1872, Standard Oil clandestine business operation and richly ironical deals were darker than the crude oil. The company hired executives to do the dirty job of bribing, threatening and scheming the refiners who couldn’t sustain rising transportation costs. Left with no choice the refiners sold their business to Standard Oil at a small price.
Thanks to shady ventures and political nexus, the company had piled a strong cash reserve. But small refineries were still the predominating threat for Standard Oil. The itch to become indisputable lord of the industry led to rampant acquisitions and hostile takeover of small refineries. The period is considered as the darkest chapter of oil industry. The one’s who were victimized by Standard Oil hostility called it the “Cleveland Massacre”. The shadowy trading of SIC could not last long but the damage was already done. Local newspaper dubbed John D. Rockefeller as an Anaconda, which had gripped the entire oil industry. A protest broke out when the conspiracy behind the SIC came to light. The members of SIC were in a constant threat as the situation became violent day by day. Tension rose when the media jumped in, to cover the whole story and investigate the cabal. A prominent writer Ida Tarbell came out with a series of stories of Standard Oil malpractices and their breach of business ethics. Many allegations were made against John D. Rockefeller, but he maintained his sang-froid and gave no justification to press reporters. He even received a death threat and carried a handgun for his personal safety. Policemen guarded his home and office all the time. Still Rockefeller was at ease, he had a tremendous ability to focus and deflect criticism.
The confidence and early bourgeois lessons played a crucial role in the success of “Standard Oil”. His patience and “let it simmer” approach while taking big decisions is oblivious to today’s maverick corporate honcho’s. When pushed John D. Rockefeller always stood his ground. He believed in his ideas of doing business were not wrong as they were entrusted by god himself. He continued his crusade in midst of the conspiracy and with in two months, the Standard Oil acquired 22 Oil refineries of 26 in Cleveland. The executives [read executioners] of Standard Oil gave three options to competing refiners – A) Sell your business to us. B) Join Standard Oil and enjoy the preferential benefits or C) Go bankrupt!. Those who held their ground were quietly wiped out. The ones who joined hands with Standard under SIC, sold their soul to the devil and the refiners who traded their business turned out to be the biggest loser’s. Rockefeller paid very little for their assets, or would offer original base construction cost. He gave minuscule goodwill, depending on refineries clientele and reputation in the market. The owners often felt being exploited, to which John justified with depreciation formula.
John D. Sincerely offered shares instead of cash to the refiners who joined his machination. He claimed “Take Standard Oil stock and your family will never know want”. His prophecy turned out to be true by the end of the 19th century. Still a puritan at heart John D. Posed as he was doing a huge favour by taking the burden off the ignorant refiners of Cleveland. He considered himself as a Moses guiding the Hebrews. He appeared calm in his negotiations and didn’t mind overpaying for a property located in a strategic position close to the railroad and river. His advice to his competitors to sell their business to Standard Oil or perish was seen as a threat, but it was indeed a sound advice. Because John knew ways of making money that no one knew.
By 1873 the oil industry was slowing down and many considered John D. Rockefeller as its Author. But in reality the rapid boom-and-bust industry was infested with reckless oil drillers and refiners who robbed the industry’s equilibrium. John D. Rockefeller’s business practices were influenced by the notion of Self Defence and company’s existence in this confused market. Some part of this is true, as foolhardy oilmen couldn’t foresee the future the industry was headed towards. The overproduction was not only the sword of Damocles for the oil industry but also a big threat to the country’s economy. John D. Rockefeller foresaw the Economic problems and took the initiative to bell the cat.
SAINT OR SINNER
“After it is all over, the religion of man is his most important possession.”
Embroiled with controversies, John D. Rockefeller and Laura never shied away from public glare at the Baptist Church. Dressed in a simple attire the couple looked just like ordinary visitors rather than millionaires. Rockefeller’s critics called him Hypocrite for trampling competitors ruthlessly and attending church for salvation. His business ethics and Baptist beliefs were highly questionable at the time when newspapers exposed Standard Oil soiled tactics. Some critics were brave enough to state that John D. Rockefeller lived two different lives. To John the critics were similar to pagan’s who didn’t believe in high spirits and acts of god. John considered himself as the rescuer on a mission to pull out the oil industry from its misery. The brouhaha continued as John festinate his divide and conquer policy in Cleveland Oil regions.
With ever-increasing empire John wanted his eyes and ears beyond the cushy boardrooms. He hired scoundrels and beguilers like John D. Archbold who could talk or trick their way out of any sticky situations. He dealt with ignorant oil drillers and refiners who regarded Standard Oil as a brassy business unit. Shadowy business operations, pool of talent and vast reserve of cash put Standard Oil on the map of Global Oil Business. Every year the company produced 1 million refined oil barrels earning $1 profit on each barrel.
The success was hampered on September 18, 1873 when Jay Cooke And Company failed because of problems in financing the Northern Pacific rail route. Which meant the bankers couldn’t recover their loans, soon panic struck in the market. People pulled their money from banks sighting bankruptcy. At stock exchange stocks of banks and railroad plummeted. The stock exchange was forced to shut down within few hours of trading. This resulted into strings of Bank Failures and the termination of many Railroad Companies. Which sadly led to widespread unemployment in America and the situation remained unchanged for the next couple of years as daily wages plunged more then 25%. The historians dubbed the recession as “Black Thursday”.
The Economic turmoil exacerbated problems of the oil industry, as many companies relied heavily on Banks and Railroads. But John D. Rockefeller was unaffected by the country’s state of affairs, as he owned a healthy stake in many Railroads and had a deep interest shielded by many prominent bankers. He saw the situation as an opportunity and slashed shareholders dividends, which significantly ameliorated his cash reserves. The Standard Oil survived the gruesome six years of depression post “Black Thursday” with calming ease.
Under Standard Oils regime, oil prices reached way below 40 cents a barrel, lower than water hauling in some regions of America. In the end the poor citizens were the sole beneficiaries of high quality product at a cheap price.
With passage of time John D. Rockefeller sitting on gold mine grew secretive and paranoid. He discouraged unfamiliar faces in and around the refinery. Whenever Standard Oil absorbed any company, he retained the owners as managers for smooth business operations. A strict guidelines were given to new partners that their collaboration with Standard Oil has to be regarded as a closely guarded secret. They were urged to retain their old stationery and to keep a secret ledger for Accounts. This way Standard Oil secretly traded, or bid for government contracts under the façade of a smaller company. By default no outside company could hold stakes in Standard Oil, if any of its existing shareholders were to give up their share, Rockefeller would happily come forward to buy them. John warned his newly joined partners to avoid the unnecessary parade of their wealth or status. The shareholders were barred to ventilate the subject of Standard Oil. John did not want people to know how and why a particular individual turned rich overnight. Standard Oil at any cost avoided unwanted attention. The policy was strictly followed, any of its employees found flaunting their assets, were fired or their contracts were terminated. Threat-seduce and terrorize were the key mantra of Standard Oil success and to form a corporation.
John D. Rockefeller added a new set of feathers in his hat by acquiring two biggest rival companies of Standard Oil. Philadelphia and Pittsburg based Oil refineries were the biggest obstacle of Standard Oil success. John arranged a secret meeting with William G Warden and Charles Lockhart, the oil barons of Philadelphia and Pittsburg. The meeting went on for hours, where John put forward the possibility of two giant companies merging into Standard Oil. Initially the owners were sceptical about John’s proposal, then John played his trump card by allowing the owners to look into his financial books. The Standard Oil ledger shocked both the refiners, they couldn’t believe their eyes. The profits the Standard Oil was making was more than his counterparts, he could even sell at the half price and still earn more than the two rival corporations. The trick of substantial profit lay in rebates, commissions, lower interest rates from banks, secured tank cars and technical expertise. The giants agreed to the merger in return of Standard Oil stocks, the proceedings of the deal were conducted in total secrecy.
It was not only John who was out on a shopping spree, his younger brother William Rockefeller, also convinced a large oil refinery Charles Pitt and Company to merge with Standard Oil, as they enjoyed preferential benefits from railroads, banks, insurance companies and politicians. Due to Standard Oils rampant takeover, the tabloids of Titusville projected John D. Rockefeller as a giant Octopus…. a monster who had spread his tentacles deep inside the oil industry.
Operating via phantom companies and subsidiaries, Standard Oil managed to shield itself from Journalists and Policy makers.
In 1875, Rockefeller and his associates formed ACME OIL Company a front organization that looked after [Hostile] takeovers of Oil refineries under John D. Archbold’s leadership. His roughneck methods aided in acquiring 27 refineries in different parts of the country in short span of a year. With further acquisitions, the Standard Oil became worlds largest Oil Refinery and monopolized global kerosene market. Exercising his prowess, John turned his attention to the transportation and logistics aspects of the business. He offered lucrative deal to Railroads that were beneficial to both the parties. His company invested largely in developing new Oil Tank cars which ensured fire safety and eliminated leakages. This way the company controlled their logistics and also blocked their competitors supply. The icing on the cake was that due to John D. Rockefeller’s investments in Railroad business, their supplies were transported virtually free. When the news surfaced some hue and cry was made by the rival companies, but they couldn’t press charges as Rockefeller had heavily invested in the Railways and hence enjoyed the perks of it. John realized that in the long run, Railways were expensive affairs, they wanted a cheaper substitute and this is where the pipelines came into the picture. The company built pipelines along with railway tracks to boost their oil production.
“I can think of nothing less pleasurable than a life devoted to pleasure.”
As one of the richest Americans, John still lived a simple life, he didn’t fancy lavish carriages, jewels or any other forms of luxury. Extremely punctual and sharp in his dressing, John reached office sharp at 9.15 am daily. Aware of industrial espionage John D. Rockefeller carefully chose words in meetings and his business correspondence. The company also used code languages in their transactions and internal communication. The doors were heavily guarded and the boardrooms had a soundproof environment. Even the locks of each cabin door was custom made which could be only opened by an orphic trick.
John D. Rockefeller’s stone mask hid his true emotions, the master of disguise used his silence as a tactical edge. He glided through the corridor swiftly without making his presence felt, it was always an everlasting pursuit at the board meetings to decode his emotions. When agitated or annoyed he would revert to long silence. An avid listener he gave his opponents enough time to put forward their thoughts. He spoke less but his words carried enormous weightage. When facing criticism he approached Big Bills “I am Deaf and Dumb” methods. John D. Was blessed with good eyes, he spotted minor errors in balance sheets and would ask to correct them politely. John was a boss from Eden, he never raised his voice or abused his employees. He spoke in a very polite fashion and his voice pitch would always be constant. Portraying a Sphinx like calm, John D. Rockefeller never showed anger or sadness in front of his employees.
Learnt from his father, John mastered the art-of-dealing-people. His company adopted one of the finest Human Resource Policy in the corporate sector of America. At Standard Oil employees were encouraged to put forward their suggestions, complaints via letters to John D. himself. To which John personally responded to each. Thanks to the open door policy, many changes took place considering employees requests and complaints. No employee was ever dissatisfied at the company. Standard Oil not only took care of its current employees but also looked after the retired employees by paying 40% higher pension than the industry standard. The formation of employee unions was strongly discouraged in the premises of Standard Oil as it threatened the ideals of the company.
At meetings John was a restless doodler and a scribbler, at times he would be found detached from the proceedings and without warning he would catch the speaker off guard by pointing loopholes in their ideas. He inspired his managers to take initiative to catapult the organization's profits, he vested powers to the deserving candidate and held the rights to undo their ideas if they were far too complicated or impractical. John not only inspired his men in the office but would write inspirational and congratulatory letters to drillers and offshore executives. The Standard Oil scouted talents in the country and hired the right sorts of people who could contribute to company’s success. He would meet his executives for lunch where he would hear them out and provide his guidance. For John D. Rockefeller, learning never stopped, he carried a small red book in which he noted suggestions for himself and his company.
At home John D. Rockefeller was a juvenile person, after the birth of his first son and fourth child in 1874. John’s family was complete, he named his son John D. Rockefeller Jr. His partners very vividly remember the day when John arrived at the 26th Avenue New York office with tears of joy in his eyes, when John junior was born. It was the only time when John D. Rockefeller appeared to be an earthling.
Guarded by outside influence, all four Rockefeller children shared a natural trait of entrepreneurship, the kids learnt great things from their father. As a ecumenical rule kids abstained themselves from dancing and took an oath to never touch tobacco and other intoxicants.
John was never a preacher nor he ever administered the beating, the children grew up in a perfect eco-system. John never told his children what is right or wrong. He made them observe his manners and John junior was the natural heir of his vast knowledge, power and money.
With kids growing up John D. Rockefeller shifted to serene “Forest Hill Estate” four miles from the Euclid Avenue. The house was the family’s holiday retreat destination, every summer Rockefeller and his family spent their time amidst nature. The house bore no extravagant piece of furniture or any other form of luxury. On Sundays children attended Church with their parents where after the sermons John would hand over money neatly folded in white envelopes to needy and poor people. Outside office John abstained talking about his business.
All his life John D. Rockefeller lived life on his own terms, he shared affable relationship with all his siblings. He showered gifts on his elder sisters. His younger brother William was doing well under his tutelage at the company, outside it Will was master of his soul. However throughout his life Rockefeller couldn’t mend his relationship with bullheaded Franklin. Frank possessed a natural cockiness and a tendency to irk his elder brother. He envied John’s power and success so much that he joined hands with Standard Oil’s archrival Alexander Scofield. Who later became Frank’s father-in-law. No matter how hard you try, you cannot make everyone happy.
IRON HAND IN A VELVET GLOVE
“Good leadership consists of showing average people how to do the work of superior people”.
In 1875, Standard Oil was world largest refinery, the company sold millions of gallons of crude oil around the world. Apart from selling world’s finest kerosene, the company also supplied Naphtha and other byproducts such as paraffin wax [used in chewing gum], Residue oil was sold as a lubricant for Railways and Machinery. The company also manufactured candles, dyes, paints, industrial acids, tar and asphalt.
Standard Oil had soared high enough to walk with the gods, no one could dare to rattle the giant. From the outset the Standard Oil was impenetrable. But John was worried about the threats, which loomed inside his realm. Some of the co-founders like Samuel Andrews were unhappy with John’s borrowing escapades from banks, against the company’s shares. John tried to reason his partner by evincing his future plans which hardheaded Andrews failed to understand. Andrews wished that he no longer wanted to be a part of the company which he had been co-founder of. Within 24 hours John arranged $100,000 to buy back his part of shares and sold it to an affluent businessman for $300,000. Thumping his iron hand John D. Rockefeller turned his setback into opportunity, the company was moving ahead no one could have stopped it. It is estimated that if Andrews had kept his shares, then by 1930 it would have been worth $900 million!
In 1878, Standard Oil Mastered the production of magnanimous oil storage tanks, elongated pipelines and paramount refineries. But huge reserves of oil discovery had led to reckless drilling and refining, the equilibrium once again went for the toss, prices dropped significantly which chewed into Standard Oil profit. Enraged John had no choice but to twist the arm of his rivals for once and for all. Having a huge interest in Railroads and owning largest web of pipelines, John refused to supply oil of rival companies on his network. With overproduction of oil the competing refineries and drillers were running short of storage facilities. Sighting no other option they approached Standard Oil to lease their storage tanks on a temporary basis, which they straight away denied, stating they don’t have a vacant storage facility. It was an utter lie, but Standard offered to buy their produce at 20% below the market price as he had to supply to his overseas market immediately. Though cunningly, Standard Oil successfully managed to restore the balance in the oil industry. Some refiners agreed to self-implored exploitation whereas some oil producers were angry, in rage the some troublemaker’s vandalized Standard Oil property.
A man of strong will, John D. Rockefeller engaged in buying spree, he purchased The Empire Oil Asset’s [a rival company] for $3.4 million, first by approaching in the priest like cordial manner but when the owner didn’t budge, the Standard Oil resorted to dirty tricks. First the company spread rumours of the Empire Oil unsafe products followed by threatening Railroad Companies to hike their prices for Empire. Under fire Empire lost the battle to the Iron hand! With this acquisition Standard Oil trust became the largest Oil producing entity in America with 90% ownership of refinery, pipelines and railroads in the country.
Many small companies fell prey to the giant, however one dwarf entity named Tidewater with a small network of pipelines rattled the hornets nest. Boasting its unshakeable throne, the bandits of John D. Rockefeller persuaded, threatened, terrorized Tidewater to abandon its plan to set new web of pipelines. Well aware of the aftermath, the owner of the Tidewater stood his ground facing the colossus adversary. Standard Oil in its quest to defeat the diminutive company, purchased lands on which the rival wished to lay its pipeline. Standard Oil even threatened Railroads to banish Tidewater for laying its network along its route. Even rumours were spread among the villagers, that Tidewater pipelines would spoil their yield rich land, as they leaked profusely. Many officials for the first time were bribed by the Standard executives to stop Tidewater in legal tangles. Undeterred by the nadir, Tidewater unconventionally trod the rocky mountain ranges and successfully laid their network. For the first time in his life the Titan was defeated but then he proved his Bean-Geste by ending his pursuit, which would have led to his victory ultimately.
By 1879 The Standard Oil trust that had absorbed more than 20 companies was indisputable major byproduct manufacture in the country. To cover the wide spread market, Standard operated entirely through hired agents who carried lobbying campaigns to stay ahead of their competitors.
By the turn of the decade Standard Oil had garnered intense adverse criticism for their clandestine business practices. In 1879 the court of Pennsylvania summoned Standard Oil head honchos for their corporate irregularities in the system. The trial took place against Standard Oil ‘Immediate Shipment Controversy’ and ‘Refusal of storage’ policy. Finding at fault the court indicted Standard Oil supremo John D. Rockefeller and his executives Flagler, William and Archbold. The so called invincible were charged with conspiracy to monopolize the oil business, extorting railroad rebates and manipulating prices to cripple the rivals. As the cartel resided outside the legal jurisdiction they couldn’t be arrested. John D. Rockefeller who made his base in New York made arrangements with politicos so that he was not extradited from the city for future court trials. John had made some great acquaintances in both high and low places in the system.
Reaping benefits for years now Standard Oil trust decided to placate the producers and oil refineries by cutting a favourable deal. By 1879 Christmas, John D. Rockefeller personally met producers and uplifted his Immediate Shipment policy. He agreed to transport oil of rival companies on his Railway and Pipeline network at reasonable rates, only if they take back their cases filed against him and his company. The decision was nothing short then a Christmas present for the victimized oil drillers and refiners.
Subsiding his legal woes, the cabal realized that over the years Standard Oil’s image had taken a huge blow. A newspaper played a major role in tarnishing their reputation. Public’s angst against the company was to be extinguished at any cost. An effective public relations campaign was the need of the hour. John D. Rockefeller invested in Cleveland newspapers Herald and Leader. Both received $5000 and $10,000 based on their readership and reach into the community. The newspapers soon carried out articles portraying the company in a positive light. The psychological warfare paid off as hoi polloi with time was ready to forgive and forget.
John D. Rockefeller and Byron Benson the brave heart CEO of Tidewater buried their hatchets and joined hands. Standard Oil trust invested heavily in Tidewaters, which gave them 70 percent of the ownership and subsequently the control over its operations. Forgive your enemy but never forget their name was Rockefeller’s motto. The Titan found a way to get an edge over his miniscule adversary by cladding his iron hand in a velvet glove.
“Don't be afraid to give up the good to go for the great.”
The 40-year-old John D. Rockefeller was one of the 20 richest men in America. But by his own standards he was just warming up. Unlike many other tycoons of the gilded age, John D. Rockefeller never indulged in vices. The family shifted to New York and lived in affluent property. The millionaire still came in his old horse carriage and owned only a few pairs of suits. He loved ice skating and riding horses with his children in New York surprising pedestrians. The chief of oil industry avoided attending clubs and parties were virtuoso of American Industry would hob-knob with cigars and a glass of champagne in hand.
In 1885 the company moved its entire operation to New York at 26 Broadway, The most popular business address in the city of New York. In this nameless building Rockefeller and his trusted men formulated the plans of oil industry dominance. Due to its shady and mysterious business operations in oil, railroads, banks and other businesses. The reporters dubbed 26 Broadway as the ‘cave of pirates…a den of cutthroats of commerce.’
Behind the fortress John D. Rockefeller managed and motivated his diverse associates. The Standard Oil trust was a body of 20 different individual companies who came together to form a synergy. Instead of shares the executives held Trust Certificates based on their investment or holdings in the cartel. At the meetings John promoted “we” and not “I” when he put forward his ideas for Standard Oil growth and prosperity. It would have been a mammoth task to control his diverse associates had it not been for his “art-of-dealing-people”. John D. Rockefeller is considered a greatest administrator of all time. In his own words –
“The ability to deal with people is as purchasable a commodity as sugar or coffee and I will pay more for that ability than for any other under the sun.”
Under John D. Rockefeller’s tutelage the Standard Oil became a multinational company. Standard Oil kerosene was sold worldwide. The product quality, packaging, production, transportation and distribution improved significantly.
At 26 Broadway, John D. Rockefeller attended meetings of different department but never uttered a single word. If the board members were stuck with some issues, John would next day show up in their department with a series of suggestions and approximations. He constantly reminded himself that ‘Don't blame the marketing department. The buck stops with the chief executive”. He possessed a unique quality of focus, if he set his mind on to something then he would never divert his attention, he would bring in the supernatural powers of concentration to bear it. He was immune to criticism, whenever his partners pointed out his shortcomings, John would adopt Big-Bill's methods of acting “Deaf and Dumb”.
At the epitome of success, never once forgotten about his parental role, John ensured his all four children received a first class education. His daughters Bessie, Alta and Eidth attended all girls’ school in New York. John D. Rockefeller junior attended John A Browning School, a custom school built only for preferential students, who were taught subjects specially designed for millionaires.
“The only question with wealth is, what do you do with it?”
Quite understandably with ever-growing personal wealth John D. Rockefeller conscientiously pursued Philanthropy. The god given bounty was employed for the upliftment of underprivileged sections of the society. Rockefeller supported the deprived individuals who failed to prosper for the lack of faith in an almighty and their endowment. These bewildered souls needed a messiah to guide them and Rockefeller with his enormous wealth just acted as the intermediate mortal. Every single dollar committed to the charitable cause ensured that it did not encourage dependency. Huge donation went to the welfare of coloured women, who were rescued from the slavery. It was John D. Rockefeller’s utmost religious belief that no human is bound to slavery, he is only subjected to the Supreme Being.
Education eradicates ignorance, which ultimately leads to freedom. Spelman College for Black women of America was the first step to abolish thralldom in the country.
“I do not think that there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.”
The Philanthropist pleased with his brotherly love towards children of god refocused his attention to his prolonged goal… the World Dominance!
Standard Oil no longer gratified with their ascendency in American territory, they desired to conquer the foreign oil industry. During those years the foreign markets were far more lucrative than domestic ones. In mid 1880’s, more the 70% of Standard Oil products were sold abroad. Predominantly Europe was the biggest consumer of Standard Oil kerosene with flourishing British common wealth, the new untouched markets of India, China, Japan and Singapore were wide open.
However growing competition in Europe chewed away Standard Oil’s business in Switzerland where Russian products dominated the market. Robert Nobel the leading arms manufacturer and Oil refiner predominantly controlled Paris market. French company The Paris Rothschild was another threat for Standard Oil in Europe. The Juggernaut of American oil industry was rubbing shoulders with its equals in the global arena.
The competitors were the major obstacles in John D. Rockefeller’s mission of World Dominance. He devised international marketing strategies and heavily invested in French and German oil companies.
To stay ahead in the game the company built a gigantic oil vessel that shipped 1 million gallons of oil in Europe and Asia. Considering the scale of the foreign market, Standard Oil strengthened their ties with Royal Dutch and Marcus Shell Transport Company. It widened Standard Oil global reach. Offshore business units were set up in – Singapore, Shanghai, Bombay, Calcutta, Yokohoma and Nagasaki. These foreign units were operated by local businessmen who tendered marketing and distribution of the Standard Oil kerosene. In Asia the packaging was given the utmost priority, the Standard Oil kerosene was packed in Blue Tin cans with wooden frames and the Asians used the empty can and wooden frame to multiple purpose.
By the end of the decade Standard Oil kerosene was widely used to lit hundred and thousands of homes, restaurants, mills and offices across Asia, Europe and America. The colossal empire of John D. Rockefeller comprised 100,000 employees, 20,000 Oil Wells, 4000 miles of pipelines across America and 5000 Standard Oil Tank cars. The company was capable of producing and supplying 50,000 barrels of refined oil to Europe daily! Marking its World Dominance by exercising aggressive marketing strategies the Standard Oil trust was the most richest, feared, highly organized and admired corporate entity in the world. Unaffected by the Economic forces the company survived recessions prosperously.
The secret of Standard Success lied in company’s bourgeoisie spending and thrift. The collusive with Railroads and business shenanigan orchestrated by John D. Rockefeller himself kept the Standard Oil afloat. Cutting loose the middleman from their distribution line saved 3-5% of the company’s revenues. The executives forced wholesalers and stores to sell only their products in order to eliminate rival products off the market. Failing to comply their demands, the Standard Oil would set up a store close by and directly sell their products to consumers at lower prices, the company implied Cross-selling by offering products such as heaters, stoves, lamps and lanterns at production cost. To carry out Standard Oil dirty work John hired top notch corporate scoundrels who tried every trick in the book to outdo government and rivals. Bidding for government contracts were carried out through dummy corporations, shielded with so many layers of ownership that it made virtually impossible to trail back to Standard Oil. In 1886 in order to acquire the contract of street gas lights, the company made a bid via a dummy corporation – National Gas Trust, when they failed to bag the contract, the company resorted to bribes.
“Next to doing the right thing, the most important thing is to let people know you are doing the right thing.”
Arrogantly the company adopted a zero tolerance policy for infiltrating small companies, who with their reckless business adventures, marred the highly organized eco-system of the oil industry. If by any chance the small business unit managed to penetrate, they were dealt with Standard Oil methods of persuasion, threat and terror!
The ruffianism not only widen their local market but also prevented adulteration of kerosene which was rampant under local middle man, jobbers, shop keepers and distributors. This adulteration made kerosene highly unsafe to burn. Few reports surfaced regarding death caused due to fire, but the company soon took the matter under control. But few miscreants kept on troubling Standard Oil.
No matter how conniving Standard Oil methods appear to be but the real beneficiary’s were the customers. Standard Oil produced the kerosene so efficiently that they sold the product high enough within consumers reach but low enough that their rivals couldn’t afford to sell.
One day making her way in, an angry woman barged into Rockefeller’s cabin and complained about their inferior quality kerosene. After carefully hearing her trouble, Rockefeller took her to the lab and tested her sample, which turned out to be adulterated. With utmost generosity Rockefeller gifted her a gallon of fresh Standard Oil kerosene. The company was devoted to the consumers and saw to it that every single customer was satisfied.
Rockefeller the puppet master of oil industry reached the high places due his hard work, persistent efforts and fetish for secrecy. Considering his role in the company, John D. Rockefeller never met strangers or the person he thought of being a conspirator. He created an atmosphere of secrecy at 26 Broadway. The elusive figure wonderfully depicted an impenetrable image of himself in the presence of his counterparts. A man of few words John D. Rockefeller carefully chose his words in meeting and correspondence. He habitually avoided using names, figures and specifications in his correspondence in fear that it might be intercepted and used against him in the court of law. Call it a paranoia or over-cautiousness but it rightfully protected the tycoon from his enemies.
In today’s world information is the key to success. Companies involved in the technology business, medicine and food and beverage industries guard their formulas and trade secrets effectively. Millions of dollars are spent worldwide to create firewalls and hack-proof systems. During 19th century no one in the industry used corporate espionage so efficiently then John D. Rockefeller. His hired eyes and ears carried the undercover work and extracted many trade secrets of his adversaries.
The rampant changing technological environment of America was another external threat the Standard Oil was facing. In 1878 Thomas Edison invented light bulb, which was safer and burned bright but with lack of infrastructure it did not appear to be an immediate threat. But by 1885, more 250,000 bulbs were sold and slowly it was catching up.
By 1880’s A New nightmare kept top honchos of Standard Oil awake at night. Some industry speculators predicted that the oil reserves of Pennsylvania and neighbouring fields were fast drying up. A panic spread across the whole industry. Sitting on top of the food chain John D. Rockefeller was advised by his partners and bankers to exit the oil business and enter a new venture, which is stable. Very quietly the tycoon heard the hue and cry, once the noise was settled he rose up, pointing towards the sky and said “The lord will provide!”
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal: